Commenting on the recent sharp increase in iron ore prices, Li Xinchuang, deputy secretary- general of China Iron and Steel Association (CISA) admitted the 19 percent growth on Monday came as a surprise, however he does not expect the rally to be sustainable.
Mr. Li said that this biggest increase on a single day could be explained to an extent by a positive reaction to China's latest pro-growth policies and plans to reduce 150 million mt of overcapacity in its steel industry, while he predicts that prices will decline to $40/mt again in the short term. The CISA official pointed out that he believes the price increase will not hold because he sees no “fundamental underlying change in the market”.
On Monday, March 7, prices of ex-Australia iron ore of 62 percent Fe content saw a daily increase of $10/mt, rising to $63/mt CFR China.